A summary of Performance Management
Performance management includes is aimed at to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. Balance scorecard is a broad based approach to business analysis which does not allow any perspective to outweigh others when a firm’s strengths and weaknesses are assessed.
Balance sore card is a methodology that converts an organization’s value drivers—such as customer service, innovation, operational efficiency and financial performance—to a series of defined metrics. Companies record and analyze these metrics to help determine if they’re achieving strategic goals (www.cio.com). The financial performance of a profit making firm is the first parameter to assess its strengths. However, it is well understood that providing superior returns to stakeholders usually depends on firm’s sustainability a competitive advantage based providing superior value for customers. At the same time it is equally important for the organization to provide superior value for customers requires the development of operations with the needed capabilities.
Financial Perspective: SBC must ask the question how much television generates over the cost of capital. The television’s operating profit is giving strong revenue, increased 28% (£5.0m) –to £23.0m (2003: £18.0m) reflecting higher airtime and network production revenues as well as exceptional growth in Broadcast & Event Solutions, with total Television revenues up 10% (£12.3m). However, it is important for SMG to project the future revenue generation capacity of television in the light of heightening competition.
Customer’s perspective: Is the television providing the customers with superior value in terms of product differentiation? In Television, SBC has a pre-eminent position in the Scottish commercial market. With the opening of the new Scottish Television studios in 2006, following those of Grampian Television in 2003, SBC will have some of the most modern and efficient television facilities available anywhere in Europe. Added to which, demand for content and production support is increasing rapidly which is fuelling growth in both the Broadcast & Event Solutions business.
Operational perspective: How effectively and efficiently do the core processes that produce customer value perform? The cost control measures taken by SBC are producing increased income and overall margins improved significantly to 17% (2003: 15%). SMG TV Productions has established an outstanding reputation for making high quality, commercially attractive programmes. Revenues in 2004 totaled over £15m a figure it is expected to grow, given the increasing requirement for regulated broadcasters to commission more programming from outside London and the ongoing growth of multi-channel television and other video platforms.
Financial Perspective: SBC must ask the question how much radio generates over the cost of capital. Radio operating profit reduced to £4.3m (2003: £7.3m), with the £3.0m fall reflecting lower advertising sales – down £3.1m – and higher digital transmission costs.
Customer’s perspective: Is radio providing the customers with superior value in terms of product differentiation? In Radio, the brand strength of Virgin Radio offers considerable growth potential in the new and rapidly growing digital arena. Already outperforming both the BBC and all other commercial radio stations in terms of audience hours for online listeners, Virgin Radio, as one of only three national commercial radio stations, is ideally positioned to benefit from the accelerating conversion to digital radio throughout the UK.
Operational perspective: How effectively and efficiently do the core processes that produce customer value perform? In Radio, the brand strength of Virgin Radio offers considerable growth potential in the new and rapidly growing digital arena. Already outperforming both the BBC and all other commercial radio stations in terms of audience hours for online listeners, Virgin Radio, as one of only three national commercial radio stations, is ideally positioned to benefit from the accelerating conversion to digital radio throughout the UK.
Financial Perspective: SBC must ask the question how much television generates over the cost of capital. Out of Home profits fell by £1.2m to £4.3m (2003: £5.5m) as a result of new contract terms in major cinema contracts and initial development of Backlight 48 sheet panels. These factors more than offset the benefit of strong revenue growth, which was up 9% (£3.8m) on the prior year. Is revenue generation sustainable?
Customer’s perspective: Is the outdoor advertising unit providing the customers with superior value in terms of product differentiation? In Cinema advertising, as with Virgin Radio, the iconic strength of the Pearl & Dean brand offers exciting potential not only in growing the screen advertising business in the UK, the Republic of Ireland and Continental Europe but also in extending the brand into other related areas.
Operational perspective: How effectively and efficiently do the core processes that produce customer value perform? In outdoor advertising, one of the fastest growing advertising sectors, Primesight already has a strong and growing presence in the six sheet market, with over 12,500 sites through the UK, and is rapidly increasing the number of high yielding Backlight panels on high profile sites across the UK’s major cities. Both markets offer scope for further profitable organic growth, which the Company is well positioned to exploit.
Tags: business analysis, event solutions, financial performance, operating profit, operational efficiency, performance management, revenue generation, strengths and weaknesses, value drivers
